The FDA's Latest Victim

The FDA just can't seem to approve anything these days. Earlier in the week, the agency delayed Eli Lilly's (NYSE:LLY) heart drug prasugrel. Now, Merck (NYSE:MRK) says it'll have to wait for a label change to its already-approved human papillomavirus (HPV) vaccine, Gardasil.

Merck said that the FDA has some "issues" with the drugmaker's request to expand the approved age range to include women aged 27 though 45 -- the vaccine is currently approved for females aged nine through 26. The data from a trial in older women looked good, so I'm a little surprised at the agency's move. Since Merck plans to have all the agency's questions answered next month, it's possible that the issues are minor and that it's just another case of the FDA not getting its job done in time.

The drugmaker also said that the FDA wouldn't approve a change to the label stating that the vaccine helps protect patients against other strains that cause cervical cancer. That doesn't seem like a major issue to me; the vaccine already claims to protect against four strains that cover a majority of cervical cancer and genital warts cases, so the additional wording probably wouldn't add much to sales.

Ironically, the FDA's increased scrutiny could be the best thing for Merck. GlaxoSmithKline (NYSE:GSK) is still trying to get its HPV vaccine, Cervarix, approved after the FDA rejected it last December. Given the choice of a rigorous FDA that denies or delays its label expansions and Cervarix's approval, versus a lax FDA that lets them both through, I think Merck would pick the rigorous FDA. Clearly, the added sales to older women would be nice, but the competition-free period in the U.S. that Merck is enjoying added nearly $300 million in sales last quarter alone.